Meta Platforms Has Slim Chances Of Rebounding In 2023


  • Although META is trading at historically low valuations, I wouldn’t bet on it rebounding in 2023.
  • The main concern is that it has lost more than $36 billion and counting betting on the metaverse, an idea that has potential but unclear commercial prospects.
  • Meanwhile, net income has declined by more than 25% in the last 2 years and the company has taken on $10 billion in debt in its first ever bond issuance.
  • Add to this the opportunity costs, including saving the $36 billion to instead acquire a metaverse company, or investing it in the core business, and you see the scale of the problem.
  • While META is still a digital ad leader, it is facing increased competition and a host of regulatory issues, making the chances of a rebound in 2023 slim.

Facebook CEO Mark Zuckerberg Testifies At Joint Senate Commerce/Judiciary Hearing

Alex Wong/Getty Images News

It has been a terrible year for the tech-heavy Nasdaq 100 (QQQ), which is down 33% YTD. Things are, however, markedly worse for Meta Platforms Inc (NASDAQ:META), which has declined 65% YTD – almost double the

META vs QQQ performance YTD

META vs QQQ performance YTD (Seeking Alpha)

META's declining net income

META’s declining net income (Seeking Alpha)

Revenues have grown in recent years

Revenues have grown in recent years (Seeking Alpha)

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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